DuPont de Nemours 10-Q 2021-09-30

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2021

or

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number: 001-38196

DUPONT DE NEMOURS, INC.

(Exact name of registrant as specified in its charter)

(302) 774-3034

(Registrant’s Telephone Number, Including Area Code)

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

Securities registered pursuant to Section 12(b) of the Act:

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

☑ Yes ¨ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

☑ Yes ¨ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). ☐ Yes ☑ No

The registrant had 518,103,842 shares of common stock, $0.01 par value, outstanding at November 1, 2021.

DuPont de Nemours, Inc.

QUARTERLY REPORT ON FORM 10-Q

For the quarterly period ended September 30, 2021

TABLE OF CONTENTS

Throughout this Quarterly Report on Form 10-Q, except as otherwise noted by the context, the terms "DuPont" or "Company" used herein mean DuPont de Nemours, Inc. and its consolidated subsidiaries. On June 1, 2019, DowDuPont Inc. changed its registered name to DuPont de Nemours, Inc. (“DuPont”) (for certain events prior to June 1, 2019, the Company may be referred to as DowDuPont). Beginning on June 3, 2019, the Company's common stock is traded on the New York Stock Exchange under the ticker symbol "DD."

On April 1, 2019, the Company completed the separation of the materials science business through the spin-off of Dow Inc., (“Dow”) including Dow’s subsidiary The Dow Chemical Company (the “Dow Distribution”). On June 1, 2019, the Company completed the separation of the agriculture business through the spin-off of Corteva, Inc. (“Corteva”) including Corteva’s subsidiary E. I. du Pont de Nemours and Company (“EID”), (the “Corteva Distribution" and together with the Dow Distribution, the “DWDP Distributions”).

On February 1, 2021 the Company completed the divestiture of the Nutrition & Biosciences (“N&B”) business to International Flavors & Fragrance Inc. (“IFF”) in a Reverse Morris Trust transaction (the “N&B Transaction”) that resulted in IFF issuing shares to DuPont stockholders.

The financial position of DuPont as of December 31, 2020 and the results of operations of DuPont for the three and nine months ended September 30, 2021 and 2020 present the historical financial results of N&B as discontinued operations. The cash flows and comprehensive income related to N&B have not been segregated and are included in the interim Consolidated Statements of Cash Flows and interim Consolidated Statements of Comprehensive Income, respectively, for all periods presented. Unless otherwise indicated, the information in the notes to the interim Consolidated Financial Statements refer only to DuPont's continuing operations and do not include discussion of balances or activity of N&B.

On July 1, 2021, DuPont completed the previously announced acquisition of the Laird Performance Materials business, (the “Laird PM Acquisition”).

On November 2, 2021, DuPont announced it has entered into a definitive agreement to acquire Rogers Corporation ("Rogers") for cash, (the “Intended Rogers Acquisition”). The transaction is subject to approval by Rogers shareholders, regulatory approvals and customary closing conditions.

On November 2, 2021, DuPont announced that it has initiated a divestiture process (the “In-Scope M&M Divestiture Process”) related to a substantial portion of its Mobility & Materials segment, (the “In-Scope M&M Businesses”). The outcome of which, including the entry into definitive agreements, is subject to approval of the DuPont Board of Directors.

DuPontTM and all products, unless otherwise noted, denoted with TM, SM or ® are trademarks, service marks or registered trademarks of affiliates of DuPont de Nemours, Inc.

FORWARD-LOOKING STATEMENTS

This communication contains "forward-looking statements" within the meaning of the federal securities laws, including Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. In this context, forward-looking statements often address expected future business and financial performance and financial condition, and often contain words such as "expect," "anticipate," "intend," "plan," "believe," "seek," "see," "will," "would," "target," and similar expressions and variations or negatives of these words.

Forward-looking statements address matters that are, to varying degrees, uncertain and subject to risks, uncertainties and assumptions, many of which that are beyond DuPont's control, that could cause actual results to differ materially from those expressed in any forward-looking statements. Forward-looking statements are not guarantees of future results. Some of the important factors that could cause DuPont's actual results to differ materially from those projected in any such forward-looking statements include, but are not limited to: (i) in connection with the Intended Rogers Acquisition, the failure to (x) obtain the necessary approval from Rogers shareholders, regulatory approvals, or anticipated tax treatment, or (y) satisfy any of the other conditions to closing; (ii) the possibility that unforeseen liabilities, future capital expenditures, revenues, expenses, earnings, synergies, economic performance, indebtedness, financial condition, losses, future prospects, business and management strategies could impact the value, timing or pursuit of the closing of the Intended Rogers Acquisition; (iii) the timing and outcome of the In-Scope M&M Divestiture Process and the risks, costs and ability to realize benefits from the pursuit of any disposition of the In-Scope M&M Businesses resulting therefrom; (iv) the ability to achieve expected benefits, synergies and operating efficiencies in connection with the Laird PM Acquisition within the expected time frames or at all or to successfully integrate Laird PM; (v) ability to achieve anticipated tax treatments in connection with the N&B Transaction, Laird PM

Acquisition or the DWDP Distributions; (vi) changes in relevant tax and other laws; (vii) indemnification of certain legacy liabilities of EID in connection with the Corteva Distribution; (viii) risks and costs related to the performance under and impact of the cost sharing arrangement by and between DuPont, Corteva and The Chemours Company related to future eligible PFAS costs; (ix) failure to effectively manage acquisitions, divestitures, alliances, joint ventures and other portfolio changes, including meeting conditions under the Letter Agreement entered in connection with the Corteva Distribution, related to the transfer of certain levels of assets and businesses; (x) uncertainty as to the long-term value of DuPont common stock; (xi) risks and uncertainties related to the novel coronavirus (COVID-19) and the responses thereto (such as voluntary and in some cases, mandatory quarantines as well as shut downs and other restrictions on travel and commercial, social and other activities) on DuPont’s business, results of operations, access to sources of liquidity and financial condition which depend on highly uncertain and unpredictable future developments, including, but not limited to, the duration and spread of the COVID-19 outbreak, its severity, the actions to contain the virus or treat its impact, and how quickly and to what extent normal economic and operating conditions resume; and (xii) other risks to DuPont's business, operations; each as further discussed in detail in and results of operations as discussed in DuPont’s annual report on Form 10-K for the year ended December 31, 2020 and its subsequent reports on Form 10-Q and Form 8-K. Unlisted factors may present significant additional obstacles to the realization of forward-looking statements. Consequences of material differences in results as compared with those anticipated in the forward-looking statements could include, among other things, business or supply chain disruption, operational problems, financial loss, legal liability to third parties and similar risks, any of which could have a material adverse effect on DuPont’s consolidated financial condition, results of operations, credit rating or liquidity. You should not place undue reliance on forward-looking statements, which speak only as of the date they are made. DuPont assumes no obligation to publicly provide revisions or updates to any forward-looking statements whether as a result of new information, future developments or otherwise, should circumstances change, except as otherwise required by securities and other applicable laws.

DuPont de Nemours, Inc.

Consolidated Statements of Operations

See Notes to the Consolidated Financial Statements.

DuPont de Nemours, Inc.

Consolidated Statements of Comprehensive Income

See Notes to the Consolidated Financial Statements.

DuPont de Nemours, Inc.

Condensed Consolidated Balance Sheets

Showing the first 8K of 169K characters. Open the full section

Management’s discussion and analysis of financial condition and results of operations is provided as a supplement to, and should be read in conjunction with, the interim Consolidated Financial Statements and related notes to enhance the understanding of the Company’s operations and present business environment. Components of management’s discussion and analysis of financial condition and results of operations include:

• Recent Developments

• Result of Operations

• Segment Results

• Changes in Financial Condition

Overview

As of September 30, 2021, the Company has $4.3 billion of working capital and approximately $1.7 billion in cash and cash equivalents. The Company expects its cash and cash equivalents, cash generated from operations, and ability to access the debt capital markets to provide sufficient liquidity and financial flexibility to meet the liquidity requirements associated with its continuing operations. The Company continually assesses its liquidity position, including possible sources of incremental liquidity, in light of the current economic environment, capital market conditions and Company performance.

On February 1, 2021, DuPont completed the separation and distribution of the Nutrition & Biosciences business segment (the "N&B Business"), and the merger of Nutrition & Biosciences, Inc. (“N&B”), a DuPont subsidiary formed to hold the N&B Business, with a subsidiary of International Flavors & Fragrances Inc. ("IFF"). The distribution was effected through an exchange offer (the “Exchange Offer”) where, on the terms and subject to the conditions of the Exchange Offer, eligible participating DuPont stockholders had the option to tender all, some or none of their shares of common stock, par value $0.01 per share, of DuPont (the “DuPont Common Stock”) for a number of shares of common stock, par value $0.01 per share, of N&B (the “N&B Common Stock”) and which resulted in all shares of N&B Common Stock being distributed to DuPont stockholders that participated in the Exchange Offer. The consummation of the Exchange Offer was followed by the merger of N&B with a wholly owned subsidiary of IFF, with N&B surviving the merger as a wholly owned subsidiary of IFF (the “N&B Merger” and, together with the Exchange Offer, the “N&B Transaction”). In connection with and in accordance with the terms of the N&B Transaction, prior to consummation of the Exchange Offer and the N&B Merger, DuPont received a one-time cash payment of approximately $7.3 billion, (the "Special Cash Payment"), which is subject to post-closing adjustment pursuant to the terms of the N&B Separation and Distribution Agreement. The company used a portion of the proceeds to retire its $3 billion term loan facilities on February 1, 2021 and used the proceeds to fund the redemption, in accordance with their terms, of the $2 billion May 2020 Notes issuance.

On July 1, 2021, the Company completed the acquisition of Laird Performance Materials ("Laird PM") from Advent International. The Company paid for the acquisition from existing cash balances. See discussion below and within “Liquidity and Capital Resources” for more information.

DWDP Merger and DWDP Distributions

Effective August 31, 2017, pursuant to the merger of equals transaction contemplated by the Agreement and Plan of Merger, dated as of December 11, 2015, as amended on March 31, 2017 ("Merger Agreement"), The Dow Chemical Company ("TDCC") and E. I. du Pont de Nemours and Company ("EID") each merged with subsidiaries of DowDuPont Inc. ("DowDuPont") and, as a result, TDCC and EID became subsidiaries of DowDuPont (the "DWDP Merger").

DowDuPont completed a series of internal reorganizations and realignment steps in order to separate into three, independent, publicly traded companies - one for each of its agriculture, materials science and specialty products businesses. DowDuPont formed two wholly owned subsidiaries: Dow Inc. ("Dow", formerly known as Dow Holdings Inc.), to serve as a holding company for its materials science business, and Corteva, Inc. ("Corteva"), to serve as a holding company for its agriculture business.

On April 1, 2019, the Company completed the separation of the materials science business through the spin-off of Dow Inc., including Dow’s subsidiary TDCC (the “Dow Distribution”). On June 1, 2019, the Company completed the separation of the agriculture business through the spin-off of Corteva including Corteva’s subsidiary EID, (the “Corteva Distribution" and together with the Dow Distribution, the “DWDP Distributions”).

Following the Corteva Distribution, the Company holds the specialty products business as continuing operations. On June 1, 2019, DowDuPont changed its registered name from "DowDuPont Inc." to "DuPont de Nemours, Inc." doing business as "DuPont" (the "Company"). Beginning on June 3, 2019, the Company's common stock is traded on the NYSE under the ticker symbol "DD."

N&B Transaction

The financial position of DuPont as of December 31, 2020 and the results of operations of DuPont for the three and nine months ended September 30, 2021 and 2020 present the historical financial results of N&B as discontinued operations. The cash flows and comprehensive income related to N&B have not been segregated and are included in the interim Consolidated Statements of Cash Flows and interim Consolidated Statements of Comprehensive Income, respectively, for all periods presented. Unless otherwise indicated, the information in the notes to the interim Consolidated Financial Statements refer only to DuPont's continuing operations and do not include discussion of balances or activity of N&B. See Note 3 to the interim Consolidated Financial Statements for additional information on the N&B Transaction.

2021 Segment Realignment

Immediately following the separation and distribution of the N&B Business, the Company made changes to its management and reporting structure (the “2021 Segment Realignment”) (see Note 23 for additional details). The reporting changes have been retrospectively reflected for all periods presented.

RECENT DEVELOPMENTS

Intended Rogers Acquisition

On November 2, 2021, the Company announced that it had entered into a definitive agreement to acquire all the outstanding shares of Rogers Corporation (“Rogers”) for about $5.2 billion (the “Intended Rogers Acquisition”). The acquisition is expected to close in the second quarter of 2022 and, when complete, is expected to broaden the Company’s presence in the electronic materials market. Rogers is highly complementary and aligned strategically with the Company’s existing Electronics & Industrial segment. The completion of the acquisition is subject to approval by Rogers shareholders, regulatory approvals and other customary closing conditions.

Mobility & Materials Segment Intended Divestiture

On November 2, 2021 the Company announced that it has initiated a divestiture process related to a substantial portion of the Mobility & Materials segment, which predominantly includes the Engineering Polymers and Performance Resins lines of business (the “In-Scope M&M Businesses”). The outcome of which, including the entry into definitive agreements, is subject to approval of the DuPont Board of Directors. The scope of the intended divestiture excludes certain product lines including Auto Adhesives and MultibaseTM. The divestiture of the In-Scope M&M Businesses may include a full or partial separation of the businesses from the Company. The Mobility & Materials segment will remain in its current management and reporting structure while these strategic alternatives are considered.

Laird Performance Materials

On July 1, 2021, DuPont completed the acquisition of Laird PM from Advent International (“Laird PM Acquisition”) for cash consideration of $2,404 million, which reflects adjustments, primarily for acquired cash and net working capital. See Note 2 to the interim Consolidated Financial Statements for additional information.

Dividends

On June 17, 2021, the Board of Directors declared a third quarter dividend of $0.30 per share, paid on September 15, 2021, to shareholders of record on July 30, 2021.

On October 14, 2021, the Company announced that its Board of Directors declared a fourth quarter dividend of $0.30 per share payable on December 15, 2021, to shareholders of record on November 30, 2021.

RESULTS OF OPERATIONS

The following table summarizes sales variances by segment and geographic region from the prior year:

1.Europe, Middle East and Africa.

The Company reported net sales for the three months ended September 30, 2021 of $4.3 billion, up 18 percent from $3.6 billion for the three months ended September 30, 2020, due to a 10 percent increase in volume, a 6 percent increase in local price and product mix, a 1 percent favorable currency impact and a 1 percent increase in portfolio actions. Volume increased across all operating segments, Mobility & Materials (up 12 percent), Electronics & Industrial (up 9 percent), and Water & Protection (up 9 percent). Volume increased across all regions. Local price was up 6 percent compared with the same period last year driven by Mobility & Materials (up 16 percent). Currency was up 1 percent compared with the same period last year, driven primarily by EMEA (up 2 percent), Latin America (up 2 percent) and Asia Pacific currencies (up 2 percent). Portfolio and other changes contributed a 1 percent growth as the addition of Laird PM in Electronics & Industrial (up 11 percent) offset the decline within Corporate (down 49 percent) due to the sale of businesses previously held in non-core.

Net sales for the nine months ended September 30, 2021 were $12.4 billion, up 17 percent from $10.6 billion for the nine months ended September 30, 2020, due to a 12 percent increase in volume, a 3 percent increase in local price and product mix, a 2 percent favorable currency impact, and portfolio remained flat. Volume increased across all operating segments, the most notable volume increases were in Mobility & Materials (up 19 percent), Electronics & Industrial (up 13 percent) and Water & Protection (up 7 percent). Volume grew across all geographic regions. Local price and product mix was up 3 percent with the same period last year. Local price increased across all regions except EMEA (flat). Currency was up 2 percent compared with the same period last year, driven primarily by EMEA (up 6 percent) and Asia Pacific currencies (up 2 percent). Portfolio and other was flat as the addition of Laird PM in Electronics & Industrial (up 4 percent) offset the decline within Corporate (down 32 percent) due to the sale of businesses previously held in non-core.

Cost of Sales

Cost of sales was $2.8 billion for the three months ended September 30, 2021, up from $2.4 billion for the three months ended September 30, 2020. Cost of sales increased for the three months ended September 30, 2021 primarily due to increased sales volume, higher raw materials costs and higher logistics costs primarily related to freight. The increase was partially offset by the absence of approximately $60 million of charges in the prior year associated with temporarily idling several manufacturing plants to align supply with demand due to COVID-19.

Cost of sales as a percentage of net sales for the three months ended September 30, 2021 was 65 percent compared with 67 percent for the three months ended September 30, 2020.

For the nine months ended September 30, 2021, cost of sales was $7.9 billion, up from $7.0 billion for the nine months ended September 30, 2020. Cost of sales increased for the nine months ended September 30, 2021 primarily due to increased sales volume, currency impacts, and higher raw materials and logistics costs partially offset by approximately $210 million of charges in the prior year associated with temporarily idling several manufacturing plants to align supply with demand due to COVID-19.

Cost of sales as a percentage of net sales for the nine months ended September 30, 2021 was 64 percent compared with 66 percent for the nine months ended September 30, 2020.

Research and Development Expenses ("R&D")

R&D expenses totaled $152 million in the third quarter of 2021, up from $140 million in the third quarter of 2020. R&D as a percentage of net sales was 4 percent for the three months ended September 30, 2021 and 2020. The increase for the three months ended September 30, 2021 as compared with the same period of the prior year was primarily due to incremental costs from the Laird PM Acquisition and higher personnel related expenses.

For the first nine months of 2021, R&D expenses totaled $456 million, down from $466 million in the first nine months of 2020. R&D as a percentage of net sales was 4 percent for the nine months ended September 30, 2021 and 2020. The decrease for the nine months ended September 30, 2021 as compared with the same period of the prior year was primarily due to productivity actions.

Selling, General and Administrative Expenses ("SG&A")

SG&A expenses were $475 million in the third quarter of 2021, up from $403 million in the third quarter of 2020. SG&A as a percentage of net sales was 11 percent for the three months ended September 30, 2021 and 2020. The increase for the three months ended September 30, 2021 as compared with the same period of the prior year was primarily due to incremental costs from the Laird PM Acquisition, currency fluctuations and higher personnel related expenses.

For the first nine months of 2021, SG&A expenses totaled $1,390 million, up from $1,299 million in the first nine months of 2020. SG&A as a percentage of net sales was 11 percent and 12 percent for the nine months ended September 30, 2021 and 2020, respectively. The increase for the nine months ended September 30, 2021 as compared with the same period of the prior year was primarily due to incremental costs from higher personnel related expenses, currency fluctuations, and the Laird PM Acquisition.

Amortization of Intangibles

Amortization of intangibles was $196 million in the third quarter of 2021, up from $172 million in the third quarter of 2020. The increase for the three months ended September 30, 2021 as compared with the same period of the prior year was primarily due to the amortization of the intangible assets acquired in the Laird PM Acquisition.

In the first nine months of 2021, amortization of intangibles was $530 million, up from $527 million in the same period of the prior year. The slight increase in the amortization of intangibles for the nine months ended September 30, 2021 compared with the same period of the prior year is primarily due to the amortization of the intangible assets acquired in the Laird PM Acquisition, partially offset by lower amortization due to the sale of the trichlorosilane business ("TCS Business") in the third quarter of 2020, as well as the classification of the Biomaterials and Clean Technologies business units as held for sale in the third quarter of 2020. See Note 13 to the Consolidated Financial Statements for additional information on intangible assets.

Restructuring and Asset Related Charges - Net

Restructuring and asset related charges - net were $1 million in the third quarter of 2021, down from $378 million in the third quarter of 2020. The activity in the third quarter of 2021 is related to the 2020 Restructuring Program. The activity in the third quarter of 2020 included asset impairment charges of $318 million related to long-lived assets in the Mobility & Materials segment, $52 million related to indefinite-lived intangible assets in Corporate, and a $8 million charge related to the 2020 Restructuring Program.

In the first nine months of 2021, restructuring and asset related charges - net were $13 million, down from $800 million in the same period last year. The activity for the nine months of 2021 is related to the 2020 Restructuring Program. The charges in the same period of 2020 included the asset impairment charges described above, asset impairment charges in Corporate of $270 million related to long-lived assets, a $21 million impairment charge related to indefinite-lived intangible assets in the Mobility & Materials segment, a $127 million charge related to the 2020 Restructuring Program, a $5 million charge related to the 2019 Restructuring Program and a $7 million charge related to the DowDuPont Cost Synergy Program.

See Note 5 to the interim Consolidated Financial Statements for additional information.

Goodwill Impairment Charges

There were no goodwill related impairments for the three and nine months ended September 30, 2021. For the three months ended September 30, 2020, the goodwill impairment charges were $183 million related to a business reported in Corporate. For the nine months ended September 30, 2020, the goodwill impairment charges were $3,214 million related to a business reported in Corporate and the Mobility & Materials and Industrial Solutions reporting units. See Note 13 to the interim Consolidated Financial Statements for additional information.

Acquisition, Integration and Separation Costs

Acquisition, integration and separation costs, primarily consist of financial advisory, information technology, legal, accounting, consulting, and other professional advisory fees. For the three and nine months ended September 30, 2021, these costs were primarily associated with the execution of activities related to strategic initiatives including the acquisition of Laird PM, the planned divestiture of the Held for Sale Disposal Group and the completed divestiture of the Solamet® business unit. For the three and nine months ended September 30, 2020, these costs were primarily associated with the execution of activities related to the post-DWDP Merger integration and the DWDP Distributions. These costs were $29 million in the third quarter of 2021, up from $22 million in the third quarter of 2020. The increase is related to the execution of these strategic initiatives in 2021. In the first nine months of 2021, acquisition, integration and separation costs were $58 million, down from $161 million in the same period last year. The decline was primarily related to the timing of the post-DWDP Merger integration activities and the DWDP Distributions.

Equity in Earnings of Nonconsolidated Affiliates

The Company's share of the earnings of nonconsolidated affiliates was $25 million in the third quarter of 2021, down from $29 million in the third quarter of 2020. In the first nine months of 2021, the Company's share of the earnings of nonconsolidated affiliates was $76 million, down from $170 million in the first nine months of 2020. The decrease for the three and nine months ended September 30, 2021 and 2020 is primarily due to the sale of DC HSC Holdings LLC and Hemlock Semiconductor L.L.C. (the "HSC Group") in the third quarter of 2020.

Sundry Income (Expense) - Net

Sundry income (expense) - net includes a variety of income and expense items such as foreign currency exchange gains or losses, interest income, dividends from investments, gains and losses on sales of investments and assets, non-operating pension and other post-employment benefit plan credits or costs, and certain litigation matters. Sundry income (expense) - net in the third quarter of 2021 was income of $8 million compared with income of $430 million in the third quarter of 2020. The third quarter of 2021 included benefits related to non-operating pension and other post-employment benefit credits of $14 million and adjustments to previous gains on divestiture and sales of other assets of $8 million, partially offset by foreign currency exchange losses of $19 million. The third quarter of 2020 included a net pre-tax benefit of $393 million related to the sale of the disposal group consisting of the TCS Business and the HSC Group ("TCS/HSC Disposal") which includes the settlement of a supply agreement dispute.

In the first nine months of 2021, sundry income (expense) - net was income of $170 million compared with income of $631 million. The first nine months of 2021 included benefits related to the sale of assets within Corporate and the Electronics & Industrial segment of $140 million and $28 million, respectively, and income related to non-operating pension and other post-employment benefit credits of $39 million, partially offset by miscellaneous expenses of $12 million and foreign currency exchange losses of $36 million. The first nine months of 2020 included a net benefit of $393 million related to the TCS/HSC Disposal, benefits related to the sale of the Compound Semiconductor Solutions business unit of $197 million, income related to non-operating pension and other post-employment benefit credits of $23 million and miscellaneous income of $16 million, partially offset by foreign currency exchange losses of $27 million.

Interest Expense

Interest expense was $115 million and $165 million for the three months ended September 30, 2021 and 2020, respectively. Interest expense was $390 million and $517 million for the nine months ended September 30, 2021 and 2020, respectively.

The decrease for the three months ended September 30, 2021 compared to the three months ended September 30, 2020 primarily relates to the maturity of the November 2020 Notes which were repaid in November 2020, the redemption of the May 2020 Notes in May 2021, and the early repayment of the $3.0 billion Term Loan Facilities in February 2021.

The decrease for the nine months ended September 30, 2021 compared to the nine months ended September 30, 2020 primarily relates to the maturity of the November 2020 Notes, the early repayment of the $3.0 billion Term Loan Facilities in February 2021, and absence of commercial paper borrowings. Refer to Note 14 to the interim Consolidated Financial Statements for additional information.

Provision for Income Taxes on Continuing Operations

The Company's effective tax rate fluctuates based on, among other factors, where income is earned and the level of income relative to tax attribute. The effective tax rate on continuing operations for the third quarter of 2021 was 22.4 percent, compared with an effective tax rate of 58.7 percent for the third quarter of 2020. The effective tax rate for the third quarter of 2020 was principally the result of a non-tax-deductible goodwill impairment charge and a non-tax-deductible goodwill allocation in connection with the TCS/HSC Disposal impacting Corporate.

For the first nine months of 2021, the effective tax rate on continuing operations was 16.7 percent, compared with (8.5) percent for the first nine months of 2020. The effective tax rate for the first nine months of 2021 was principally the result of a $59 million tax benefit related to the step-up in tax basis in the goodwill of the Company’s European regional headquarters legal entity. The effective tax rate for the first nine months of 2020 was principally the result of a non-tax-deductible goodwill impairment charge impacting Corporate in the first and third quarter and a non-tax-deductible goodwill impairment charge impacting the Mobility & Materials and Industrial Solutions reporting units in the second quarter, coupled with an allocation of non-tax-deductible goodwill related to the TCS/HSC Disposal.

SEGMENT RESULTS

The Company's measure of profit/loss for segment reporting purposes is Operating EBITDA as this is the manner in which the Company's chief operating decision maker ("CODM") assesses performance and allocates resources. The Company defines Operating EBITDA as earnings (i.e., “Income from continuing operations before income taxes") before interest, depreciation, amortization, non-operating pension / OPEB benefits / charges, and foreign exchange gains / losses, adjusted for significant items. Reconciliations of these measures can be found in Note 23 to the interim Consolidated Financial Statements.

Effective February 1, 2021, DuPont changed its management and reporting structure. The reporting changes have been retrospectively reflected in the following discussion of segment results for all periods presented. See Note 23 to the interim Consolidated Financial Statements for additional information.

ELECTRONICS & INDUSTRIAL

The Electronics & Industrial segment is a leading global supplier of differentiated materials and systems for a broad range of consumer electronics including mobile devices, television monitors, personal computers and electronics used in a variety of industries. The segment is a leading provider of materials and solutions for the fabrication and packaging of semiconductors and integrated circuits, and provides innovative solutions for thermal management and electromagnetic shielding as well as metallization processes for metal finishing, decorative, and industrial applications. Electronics & Industrial is a leading provider of platemaking systems and photopolymer plates for the packaging graphics industry, digital printing inks and cutting-edge materials for the manufacturing of displays for organic light emitting diode ("OLED"). In addition, the segment produces innovative engineering polymer solutions, high performance parts, medical silicones and specialty lubricants.

Electronics & Industrial net sales were $1,467 million for the three months ended September 30, 2021, up 21 percent from $1,213 million for the three months ended September 30, 2020. Net sales increased due to a 11 percent portfolio increase, a 9 percent increase in volume and a 1 percent favorable currency impact. Local price and product mix were flat. The portfolio impact reflects the July 1, 2021 acquisition of Laird PM. Volume growth was led by Industrial Solutions reflecting broad-based demand most notably in consumer electronics, healthcare and industrial markets. Continued strength in Semiconductor Technologies was driven by ongoing digital transformation accelerated by on-going transition to more advanced technologies and growth in high performance computing and 5G communications. Within Interconnect Solutions, volume declined due to a shift in demand for material content in next-generation smartphones to the first half of the year and supply chain constraints within the automotive market. The global semiconductor chip shortage is expected to continue in the fourth quarter.

Operating EBITDA was $475 million for the three months ended September 30, 2021, up 13 percent compared with $421 million for the three months ended September 30, 2020. Operating EBITDA increased due to the acquisition of Laird PM and strong volume growth, partially offset by higher raw materials and logistics costs and the absence of income in 2020 related to a previous asset sale.

Electronics & Industrial net sales were $4,087 million for the nine months ended September 30, 2021, up 19 percent from $3,439 million for the nine months ended September 30, 2020. Net sales increased due to a 13 percent increase in volume, a 4 percent increase due to portfolio actions, and a 2 percent favorable currency impact. Local price and product mix were flat. Volume growth was driven by Industrial Solutions due to increased demand most notably in the consumer electronics and the healthcare markets. Continued volume growth in Semiconductor Technologies was led by new technology ramps at advanced nodes within logic and foundry and growth in high performance computing and 5G communications. Within Interconnect Solutions, volume growth was driven by broad based electronics demand and recovery in industrial applications. The portfolio impact reflects the July 1, 2021 acquisition of Laird PM within Interconnect Solutions.

Operating EBITDA was $1,335 million for the nine months ended September 30, 2021, up 23 percent compared with $1,084 million for the nine months ended September 30, 2020 driven by strong volume growth and the acquisition of Laird PM. The nine months ended September 30, 2021 and 2020 include income of $28 million and $30 million, respectively, related to the sale of assets.

WATER & PROTECTION

The Water & Protection segment is a leading provider of engineered products and integrated systems for a number of industries including worker safety, water purification and separation, aerospace, energy, medical packaging and building materials. The segment satisfies the growing global needs of businesses, governments, and consumers for solutions that make life safer, healthier, and better. By uniting market-driven science with the strength of highly regarded brands, the segment strives to bring new products and solutions to solve customers' needs faster, better and more cost effectively.

Water & Protection net sales were $1,397 million for the three months ended September 30, 2021, up 12 percent from $1,249 million for the three months ended September 30, 2020. Net sales increased due to a 9 percent increase in volume, a 2 percent increase in local price, and a 1 percent favorable currency impact. Portfolio remained flat. Strong volume gains were led by Safety Solutions as continued recovery in industrial end-markets resulted in significant improvement in aramid fibers. Shelter Solution saw strong demand in residential construction, do-it-yourself applications and continued recovery in commercial construction. Volume growth in Water Solutions was driven by ion exchange resins.

Operating EBITDA was $353 million for the three months ended September 30, 2021, up 12 percent compared with $314 million for the three months ended September 30, 2020 as volume gains and the absence of costs associated with temporarily idling several manufacturing facilities during the COVID-19 pandemic were partially offset by higher raw material and logistics costs.

Water & Protection net sales were $4,137 million for the nine months ended September 30, 2021, up 10 percent from $3,769 million for the nine months ended September 30, 2020 driven by a 7 percent increase in volume, a 2 percent favorable currency impact, and a 1 percent increase in local price. Portfolio was flat. Volume growth across the segment was driven by recovery of end markets following the COVID-19 pandemic. Volume gains were led by Safety Solutions due to the continued recovery in end-markets for aramid fibers. Within Shelter Solutions, volume growth was driven by the ongoing recovery of non-residential markets and continued demand in residential construction and do-it-yourself applications.

Operating EBITDA was $1,060 million for the nine months ended September 30, 2021, up 5 percent compared with $1,010 million for the nine months ended September 30, 2020 as volume gains and the absence of costs associated with temporarily idling several manufacturing facilities were partially offset by higher raw material and logistics costs.

MOBILITY & MATERIALS

The Mobility & Materials segment provides high-performance engineering resins and adhesives to engineers and designers in the transportation, electronics, industrial and consumer end-markets to enable systems solutions for demanding applications and environments. The segment delivers a broad range of polymer-based high-performance materials in its product portfolio, including elastomers and thermoplastic and thermoset engineering polymers which are used by customers to fabricate components for mechanical, chemical and electrical systems. In addition, the segment supplies key materials for the manufacturing of photovoltaic cells and panels, including backsheet materials and silicone encapsulates and adhesives. The segment provides specialty pastes and films used in consumer electronics, automotive, and aerospace markets. Mobility & Materials is a global leader of advanced materials that provides technologies that differentiate customers’ products with improved performance characteristics enabling the transition to hybrid-electric-connected vehicles and high speed high frequency connectivity.

Mobility & Materials net sales were $1,298 million for the three months ended September 30, 2021, up 30 percent from $996 million for the three months ended September 30, 2020. Net sales increased due to a 16 percent increase in local price, a 12 percent increase in volume, and a 2 percent favorable currency impact. The local price increase reflects actions taken to offset higher raw material costs and higher metals pricing. Volume growth across the segment was driven by the continued recovery of key industrial end markets following the COVID-19 pandemic, most notably the recovery of the global automotive market. The global semiconductor chip shortage is expected to continue in the fourth quarter.

Operating EBITDA was $280 million for the three months ended September 30, 2021, compared with $160 million for the nine months ended September 30, 2020. The increase was driven by higher volumes, pricing gains, and the absence of charges recorded in the prior year associated with temporarily idling several manufacturing facilities during the COVID-19 pandemic.

Mobility & Materials net sales were $3,783 million for the nine months ended September 30, 2021, up 31 percent from $2,877 million for the nine months ended September 30, 2020. Net sales increased due to a 19 percent increase in volume, a 9 percent increase in local price and a 3 percent favorable currency impact. Volume growth was attributable to the continued recovery of key end markets, primarily the global automotive market. The local price increase reflects actions taken to offset higher raw material costs and higher metals pricing.

Operating EBITDA was $852 million for the nine months ended September 30, 2021, compared with $352 million for the nine months ended September 30, 2020 driven by higher volumes, pricing gains, and the absence of $160 million of charges recorded in the prior year associated with temporarily idling several manufacturing facilities, as referenced above.

Corporate

Corporate includes certain enterprise and governance activities including non-allocated corporate overhead costs and support functions, leveraged services, non-business aligned litigation expenses and other costs not absorbed by reportable segments. The sales and activity of to be divested and previously divested businesses including the operations of Biomaterials, Clean Technologies, and Solamet® business units, and the TCS Business along with its equity ownership interest in DC HSC Holdings LLC and Hemlock Semiconductor L.L.C. (the "HSC Group”) historically included in the Non-Core segment are reflected as Corporate activity.

CHANGES IN FINANCIAL CONDITION

Liquidity & Capital Resources

Information related to the Company's liquidity and capital resources can be found in the Company's Current Report on Form 8-K filed on June 3, 2021, Part II, Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations, Liquidity and Capital Resources. Discussion below provides the updates to this information for the nine months ended September 30, 2021.

The Company continually reviews its sources of liquidity and debt portfolio and may make adjustments to one or both to ensure adequate liquidity and increase the Company’s optionality and financing efficiency as it relates to financing cost and balancing terms/maturities. The Company’s primary source of incremental liquidity is cash flows from operating activities. Management expects the generation of cash from operations and the ability to access the debt capital markets and other sources of liquidity will continue to provide sufficient liquidity and financial flexibility to meet the Company’s and its subsidiaries' obligations as they come due.

1.Includes the current portion of long-term debt that is within the "Accrued and other current liabilities" line in the interim Condensed Consolidated Balance Sheets.

The Company's cash and cash equivalents at September 30, 2021 and December 31, 2020 were $1.7 billion and $2.5 billion, respectively, of which $1.4 billion at September 30, 2021 and $1.8 billion at December 31, 2020 were held by subsidiaries in foreign countries, including United States territories. The decrease in cash and cash equivalents held by subsidiaries in foreign countries is due to repatriation activities necessary for completing the acquisition of Laird PM. For each of its foreign subsidiaries, the Company makes an assertion regarding the amount of earnings intended for permanent reinvestment, with the balance available to be repatriated to the United States. The decrease in cash and cash equivalents was primarily due to the completion of the Laird PM Acquisition.

Total debt at September 30, 2021 and December 31, 2020 was $10.6 billion and $15.6 billion, respectively. The decrease was primarily due to the termination and repayment of the Company's $3 billion Term Loan Facilities in the first quarter of 2021, and the redemption of the May 2020 Notes in the second quarter of 2021, described further below, in accordance with special mandatory redemption feature.

As of September 30, 2021, the Company is contractually obligated to make future cash payments of $10,700 million and $6,183 million associated with principal and interest, respectively, on debt obligations assuming held to maturity. Related to the principal balance, the majority of it will be due subsequent to September 30, 2022. Related to interest, $503 million will be due in the next twelve months and the remainder will be due subsequent to September 30, 2022. The decrease in debt and interest obligations since December 31, 2020 is mostly due to the termination and repayment of the $3 billion Term Loan Facilities and the redemption of the May 2020 Notes.

Special Cash Payment

In connection with and in accordance with the terms of the N&B Transaction, prior to consummation of the Exchange Offer and the N&B Merger, DuPont received a one-time cash payment of approximately $7.3 billion, (the "Special Cash Payment"), which is subject to post-closing adjustment pursuant to the terms of the N&B Separation and Distribution Agreement. The Company utilized the Special Cash Payment to repay the $3 billion Term Loan Facilities and used a portion of the Special Cash Payment to redeem the May 2020 Notes, as discussed below.

Term Loan and Revolving Credit Facilities

In November 2018, the Company entered into a term loan agreement that establishes two term loan facilities in the aggregate principal amount of $3 billion, (the “Term Loan Facilities”) as well as a five-year $3 billion revolving credit facility (the “Five-Year Revolving Credit Facility”). Effective May 2, 2019, the Company fully drew the two Term Loan Facilities in the aggregate principal amount of $3.0 billion and the Five-Year Revolving Credit Facility became effective and available. The Five-Year Revolving Credit Facility is generally expected to remain undrawn, and serve as a backstop to the Company’s commercial paper and letter of credit issuance.

On February 1, 2021, the Company terminated its fully drawn $3 billion Term Loan Facilities. The termination triggered the repayment of the aggregate outstanding principal amount of $3 billion, plus accrued and unpaid interest through and including January 31, 2021. The Company funded the repayment with proceeds from the Special Cash Payment.

On April 15, 2021, the Company entered into an updated $1.0 billion 364-day revolving credit facility (the “2021 $1B Revolving Credit Facility") as the $1.0 billion 364-day revolving credit facility entered in April 2020 (the “2020 $1B Revolving Credit Facility") expired mid-April. As of the effectiveness of the 2021 $1B Revolving Credit Facility, the 2020 $1B Revolving Credit Facility was terminated. The $1B Revolving Credit facility may be used for general corporate purposes.

May 2020 Debt Offering

On May 1, 2020, the Company completed an underwritten public offering of senior unsecured notes (the “May 2020 Notes”) in the aggregate principal amount of $2 billion of 2.169 percent fixed rate Notes due May 1, 2023 (the “May 2020 Debt Offering”). Upon consummation of the N&B Transaction, the special mandatory redemption feature of the May 2020 Debt Offering was triggered, requiring the Company to redeem all of the May 2020 Notes at a redemption price equal to 100% of the aggregate principal amount of the May 2020 Notes plus accrued and unpaid interest. The Company redeemed the May 2020 Notes on May 13, 2021 and funded the redemption with proceeds from the Special Cash Payment.

Laird Performance Materials

On July 1, 2021, the Company completed the acquisition of Laird PM from Advent International for aggregate consideration of $2.4 billion, which reflects adjustments, including for acquired cash and net working capital. The acquisition is part of the Interconnect Solutions business within the Electronics & Industrial segment. The Company paid for the acquisition from existing cash balances.

Intended Rogers Acquisition

On November 2, 2021, the Company announced that it had entered into a definitive agreement to acquire all the outstanding shares of Rogers for about $5.2 billion. The acquisition is expected to close in the second quarter of 2022 and, when complete, is expected to broaden the Company’s presence in the electronic materials market. Rogers is highly complementary and aligned strategically with the Company’s existing Electronics & Industrial segment. The completion of the acquisition is subject to Rogers shareholder approval, regulatory approvals and other customary closing conditions.

The Company entered into a Bridge Letter in an aggregate principal amount of $5.2 billion to secure committed financing for the Intended Rogers Acquisition. The Company intends to replace the Bridge Letter with other sources of financing prior to the closing of the Intended Rogers Acquisition.

Credit Ratings

The Company's credit ratings impact its access to the debt capital markets and cost of capital. The Company remains committed to a strong financial position and strong investment-grade rating. At October 29, 2021, DuPont's credit ratings were as follows:

The Company's indenture covenants related to its 2018 Senior Notes contain certain limitations on the Company’s ability to incur liens and enter into sale lease-back transactions, mergers and consolidations as well as customary events of default. The Five-Year Revolving Credit Facility and the 2021 $1B Revolving Credit Facilities contain a financial covenant, typical for companies with similar credit ratings, requiring that the ratio of Total Indebtedness to Total Capitalization for the Company and its consolidated subsidiaries not exceed 0.60. At September 30, 2021, the Company was in compliance with this financial covenant.

Summary of Cash Flows

The Company’s cash flows from operating, investing and financing activities, as reflected in the interim Consolidated Statements of Cash Flows, are summarized in the following table. The cash flows related to N&B have not been segregated and are included in the interim Consolidated Statements of Cash Flows for the nine months ended September 30, 2021 and 2020.

Cash Flows from Operating Activities

In the first nine months of 2021, cash provided by operating activities was $1,660 million, compared with $2,794 million in the same period last year. The decrease in cash provided by operating activities was primarily due to an increase in the use of cash for net working capital. Activity related to the N&B business is included in all nine months of the comparative period and the first month of 2021.

1.Net working capital as presented excludes the assets and liabilities related to the N&B Transaction. The assets and liabilities related to the N&B Transaction are presented as assets of discontinued operations and liabilities of discontinued operations, respectively, in the Condensed Consolidated Balance Sheets for the year ended December 31, 2020.

Cash Flows from Investing Activities

In the first nine months of 2021, cash used for investing activities was $2,727 million, compared an inflow of cash from investing activities of $35 million in the first nine months of 2020. The increase in cash used was primarily attributable to the acquisition of Laird PM on July 1, as well as a decrease in proceeds from sales of property and businesses (net of cash dividend), offset by lower capital expenditures. Activity related to the N&B business is included in all nine months of the comparative period and the first month of 2021.

Cash Flows from Financing Activities

In the first nine months of 2021, cash used for financing activities was $5,921 million compared with cash provided by financing activities of $5,830 million in the same period last year. The primary driver of the increase in cash used was an increase in payments on long-term debt, a decrease in proceeds from long-term debt issuances, and an increase in share purchases of common stock, partially offset by proceeds from issuances of long-term debt transferred to IFF at split-off. Activity related to the N&B business is included in all nine months of the comparative period and the first month of 2021.

Dividends

On February 18, 2021, the Board of Directors declared a first quarter dividend of $0.30 per share, paid on March 15, 2021, to shareholders of record on March 1, 2021.

On April 28, 2021, the Board of Directors declared a second quarter dividend of $0.30 per share, paid on June 15, 2021, to shareholders of record on May 28, 2021.

On June 17, 2021, the Board of Directors declared a third quarter dividend of $0.30 per share, paid on September 15, 2021, to shareholders of record on July 30, 2021.

On October 14, 2021, the Company announced that its Board declared a fourth quarter dividend of $0.30 per share payable on December 15, 2021, to shareholders of record on November 30, 2021.

Share Buyback Programs

On June 1, 2019, the Company's Board of Directors authorized a $2 billion share buyback program, which expired on June 1, 2021 ("2019 Share Buyback Program"). At the expiry of the 2019 Share Buyback Program, the Company had repurchased and retired a total cost of 29.9 million shares at a cost of $2 billion.

In the first quarter of 2021, the Company's Board of Directors authorized a new $1.5 billion share buyback program, which expires on June 30, 2022 ("2021 Share Buyback Program"). As of September 30, 2021, the Company has repurchased and retired a total of 8.1 million shares for $625 million under the 2021 Share Buyback Program.

See Part II, Item 2. Unregistered Sales of Equity Securities and Use of Proceeds, for additional information.

Pension and Other Post-Employment Plans

DuPont expects to make additional contributions in the aggregate of approximately $46 million by year-end 2021 to pension and other post-employment benefit plans. Any such contribution could be funded by existing cash balances and/or cash from other available sources of liquidity.

Restructuring

In March 2020, the Company approved restructuring actions designed to capture near-term cost reductions and to further simplify certain organizational structures in anticipation of the N&B Transaction (the "2020 Restructuring Program"). As a result of these actions, the Company recorded pre-tax restructuring charges of $181 million inception-to-date, consisting of severance and related benefit costs of $129 million and asset related charges of $52 million. Actions associated with the 2020 Restructuring Program are considered substantially complete. Future cash payments related to the 2020 Restructuring Program are anticipated to be $25 million primarily related to the payment of severance and related benefits.

In June 2019, DuPont approved restructuring actions to simplify and optimize certain organizational structures following the completion of the DWDP Distributions (the "2019 Restructuring Program"). As a result of these actions, the Company has recorded pre-tax restructuring charges of $126 million inception-to-date, consisting of severance and related benefit costs of $99 million and asset related charges of $27 million. Actions associated with the 2019 Restructuring Program are considered substantially complete. Future cash payments related to the 2019 Restructuring Program are anticipated to be $5 million and relate to the payment of severance and related benefits.

In September and November 2017, the Company approved post-merger restructuring actions under the DowDuPont Cost Synergy Program (the "Synergy Program"), adopted by the DowDuPont Board of Directors. The Synergy Program was designed to integrate and optimize the organization following the DWDP Merger and in preparation for the DWDP Distributions whereby the Company has recorded pre-tax restructuring charges attributable to the continuing operations of DuPont of $345 million inception-to-date, consisting of severance and related benefit costs of $137 million, asset related charges of $159 million and contract termination charges of $49 million. Actions associated with the Synergy Program, including employee separations, are considered substantially complete. Future cash payments related to the Synergy Program are anticipated to be $8 million and relate to the payment of severance and related benefits.

See Note 5 to the interim Consolidated Financial Statements for more information on the Company's restructuring programs.

Off-balance Sheet Arrangements

Guarantees arise in the ordinary course of business from relationships with customers and nonconsolidated affiliates when the Company undertakes an obligation to guarantee the performance of others if specific triggering events occur. At September 30, 2021 and December 31, 2020, the Company had directly guaranteed $178 million and $189 million, respectively, of such obligations. Additional information related to the guarantees of the Subsidiaries can be found in the “Guarantees” section of Note 15 to the interim Consolidated Financial Statements.

See Note 21 to the interim Consolidated Financial Statements. See also Part II, Item 7A. Quantitative and Qualitative Disclosures About Market Risk, of the Company's Current Report on Form 8-K filed on June 3, 2021 for information on the Company's utilization of financial instruments and an analysis of the sensitivity of these instruments.

Evaluation of Disclosure Controls and Procedures

The Company maintains a system of disclosure controls and procedures to give reasonable assurance that information required to be disclosed in the Company's reports filed or submitted under the Securities Exchange Act of 1934 (Exchange Act) is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC. These controls and procedures also give reasonable assurance that information required to be disclosed in such reports is accumulated and communicated to management to allow timely decisions regarding required disclosures.

As of September 30, 2021, the Company's Chief Executive Officer (CEO) and Chief Financial Officer (CFO), together with management, conducted an evaluation of the effectiveness of the Company's disclosure controls and procedures pursuant to Rules 13a-15(e) and 15d-15(e) of the Exchange Act. Based on that evaluation, the CEO and CFO concluded that these disclosure controls and procedures are effective.

Changes in Internal Control Over Financial Reporting

There were no changes in the Company's internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of Exchange Act Rules 13a-15 and 15d-15 that was conducted during the last fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.

ITEM 1. LEGAL PROCEEDINGS

The Company and its subsidiaries are subject to various litigation matters, including, but not limited to, product liability, patent infringement, antitrust claims, and claims for third party property damage or personal injury stemming from alleged environmental torts. Information regarding certain of these matters is set forth below and in Note 15 to the interim Consolidated Financial Statements.

Litigation

See Note 15 to the interim Consolidated Financial Statements.

Environmental Proceedings

The Company believes it is remote that the following matters will have a material impact on its financial position, liquidity or results of operations. The description is included per Regulation S-K, Item 103(c) of the Securities Exchange Act of 1934.

Divested Neoprene Facility, La Place, Louisiana - EPA Compliance Inspection

In 2016, the EPA conducted a focused compliance investigation at the Denka Performance Elastomer LLC (“Denka”) neoprene manufacturing facility in La Place, Louisiana. EID sold the neoprene business, including this manufacturing facility, to Denka in the fourth quarter of 2015. Subsequent to this inspection, the U.S. Environmental Protection Agency (“EPA”), the U.S. Department of Justice (“DOJ”), the Louisiana Department of Environmental Quality (“DEQ”), the Company (originally through EID), and Denka began discussions in the spring of 2017 relating to the inspection conclusions and allegations of noncompliance arising under the Clean Air Act, including leak detection and repair. DuPont, Denka, EPA, DOJ and DEQ are continuing these discussions, which include potential settlement options.

New Jersey Directive PFAS

On March 25, 2019, the New Jersey Department of Environmental Protection (“NJDEP”) issued a Directive and Notice to Insurers to a number of companies, including Chemours, DowDuPont, EID, and certain DuPont subsidiaries. NJDEP’s allegations relate to former operations of EID involving poly- and perfluoroalkyl substances, (“PFAS”), including PFOA and PFOA- replacement products. The NJDEP seeks past and future costs of investigating, monitoring, testing, treating, and remediating New Jersey’s drinking water and waste systems, private drinking water wells and natural resources including groundwater, surface water, soil, sediments and biota. The Directive seeks certain information as to future costs and information related to the historic uses of PFAS and replacement chemicals including “information ranging from use and discharge of the chemicals through wastewater treatment plants, air emissions, and sales of products containing the chemicals to current development, manufacture, use and release of newer chemicals in the state.”

There have been no material changes in the Company's risk factors discussed in Part I, Item 1A, Risk Factors, in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Issuer Purchases of Equity Securities

The following table provides information regarding purchases of the Company’s common stock by the Company during the three months ended September 30, 2021:

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

None.

*Filed herewith

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

DUPONT DE NEMOURS, INC.

Registrant

Date: November 3, 2021